Abstract
Due to the Foreign Corrupt Practices Act (FCPA), anti-corruption enforcement has gained importance nationally and internationally—especially in corporate prosecutions. Subsequently, we first ask how the enforcement process has evolved since FCPA prosecutions began; second, what organizational structures support the organizational embedding of corruption; and third, what is the empirical relevance of organizational corruption in the US. Using a full survey of FCPA cases between 1977 and 2018, we show that the number of filed cases is systematically connected with the type of procedural conclusions and its sanctioning. Using case studies, we qualitatively illustrate the embeddedness of corrupt structures in firms and descriptively demonstrate, based on the aforementioned FCPA full survey that organizationally embedded corruption as a distinct form is similarly prevalent as corruption committed by individuals for personal gain.
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Notes
- 1.
The following official documents were available in different combinations depending on the case: Indictment, Information, Judgement, Deferred Prosecution Agreement (DPA), Non-prosecution Agreement (NPA), Plea Agreement, and Press Releases.
- 2.
- 3.
Regarding the defendants, the appellate judge also stated: “That is not to say that the Lindsey Defendants are entitled to a finding of factual innocence; they are not” (U.S. v. Enrique Aguilar, et al., 10-cr-1031, Order Granting Defendants' Motion to Dismiss First Superseding Indictment [as to Enrique Aguilar, et al.], p. 41).
- 4.
As regards the conduct of the proceedings, the appellate judge found: “The Government has acknowledged making many “mistakes,” as it characterizes them. “Many” indeed. So many in fact, and so varied, and occurring over so lengthy a period (between 2008 and 2011) that they add up to an unusual and extreme picture of a prosecution gone badly awry” (U.S. v. Enrique Aguilar, et al., 10-cr-1031, Order Granting Defendants' Motion to Dismiss First Superseding Indictment [as to Enrique Aguilar, et al.], p. 6).
- 5.
U.S. v. Enrique Aguilar, et al., 10-cr-1031, Order Granting Defendants' Motion to Dismiss First Superseding Indictment [as to Enrique Aguilar, et al.], p. 41f.
- 6.
- 7.
We combine all Deferred Prosecution Agreements (DPA), Non-prosecution Agreements (NPA), and Plea Agreements resulting from the SEC and DoJ lawsuits into one over-category and dichotomize for the individual cases whether one or more agreements exist or not.
- 8.
The presumption that prosecutors avoid complex cases against individuals because “prosecutors know from their interactions with lawyers for individuals that, unlike with the corporation, they are likely to have a fight on their hands if they bring charges” (Fishbein 2014, p. 1) also fits into the idea of a cost-benefit calculation.
- 9.
This decision excludes many ‘promising’ cases, e.g., from the pharmaceutical industry (Eli Lilly, Novartis), the automotive industry (Daimler), the health sector (HealthSouth), the transportation industry (Panalpina), or the engineering and information technology sector (Hewlett Packard, Hitachi, Oracle).
- 10.
U.S. v. Rolls-Royce PLC, 16-CR-247.
- 11.
U.S. v. SBM Offshore, 17-CR-00685; U.S. v. SBM Offshore N.V., 17-CR-00686.
- 12.
U.S. v. Alstom S.A. et al., 3:14-CR-00245-JBA, 3:14-CR-00246-JBA, 3:14-CR-00247-JBA, 3:14-CR-00248-JBA.
- 13.
See case-complex: U.S. v. Siemens S.A. (Venezuela), 08-CR-370-RJL; U.S. v. Siemens Bangladesh Limited, 08-CR-369-RJL; U.S. v. Siemens S.A. (Argentina), 08-CR-368-RJL; U.S. v. Siemens Aktiengesellschaft, 08-CR-367-RJL.
- 14.
The investigations “includes the extensive and sustained participation of approximately 100 lawyers and 100 support staff from Debevoise and 130 forensic accountants and support staff from Deloitte. The investigative work has taken place in 34 countries and has involved over 1,750 interviews and over 800 informational meetings. Over 100 million documents have been collected and preserved, many of which have been searched or reviewed for evidence relevant to the investigation. Siemens, either directly or through Debevoise, has produced to the Department over 24,000 documents, amounting to over 100,000 pages” (U.S v Siemens Aktiengesellschaft et al., 08-cr-00367-RJL, Department’s Sentencing Memorandum, p. 19).
- 15.
He was a “prominent businessman in Latin America” (U.S. v. Uriel S., 11-CR-1056, Indictment, p.7) and board member of Siemens Argentina from 1988 till 2003, who had served as the main intermediary during the acquisition of the DNI contract.
- 16.
U.S. v. Jefferson, 07-CR-209-TSE.
- 17.
Congressman Jefferson, for instance, took the bait of the FBI in a sting operation that was sufficient to convince the jury of his guilt, serving as proof of a conspiracy to violate the FCPA. Prior allegations of FCPA violations in Africa were not the subject of the subsequent trial, and the only substantive FCPA violation was dismissed by the jury. Apparently, as a consequence of Jefferson’s history of passive corruption, some jury members believed he would not have passed the monies that he received on, as he had in fact promised, but rather keep them for himself. The case thus illustrates ‘pure’ individual corruption, even though the demand for bribes from Jefferson’s gate keeper function may have triggered organizational corruption as well—if the government’s allegations in the indictment were factually correct.
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Fürstenberg, A., Klinkhammer, J. (2023). In Search of Organizational Crime in the U.S.: the FCPA Court Records. In: Pohlmann, M., et al. Organizational Crime. Organization, Management and Crime - Organisation, Management und Kriminalität. Springer VS, Wiesbaden. https://doi.org/10.1007/978-3-658-38960-4_12
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